gravitate

Enron Scandal	Apr 15th, 2008 4:57:57 pm - Subscribe
Among the many problems plaguing our society in the United States, one of the most devastating across all economical and socio – economic lines is that of elite deviance. Elite deviance is detrimental to our nation because it affects not only people closely affiliated with those engaging in the deviant behavior, but it also affects millions of people loosely affiliated with the CEO’s committing the deviance. Corporate crime and elitist level deviant behavior is not crime that just harms one person or entity. It can affect all that have any ties to said company or organization. Of all the cases of elite deviance, none are as well known as the Enron Scandal. The scandal in its entirety would far exceed the set page limit for this assignment, so in a nutshell, I shall cover the highlights of the Enron Scandal and relate its events to the text we read throughout this semester. The Enron Scandal involved Enron and its accounting service, Arthur Andersen. Enron being a highly desired and respected stock had much to lose when it’s worth virtually bottomed – out. Stock shares went from ninety – dollars a share to less than fifty cents a share in a short period of time. When this scandal surfaced and was made public, the stock shares dissipated in worth. The origins of the scandal were with the company and many of its private deals not documented or claimed on the company’s tax forms. Moreover, business deals that were made to appear as if they were with other companies were concealed as such and conversely made with sub – sector branches of Enron. This was done and orchestrated at the highest level of the company in vain efforts to retain gross amounts of profits. The first publicly known filing of bankruptcy was in early December 2001. Needless to say, Enron suffered astronomical losses and Arthur Andersen completely disappeared. This affected millions of shareholders and investors because at the time of Enron filing Chapter Eleven bankruptcy, Arthur Andersen was in the top 5 accounting firms in the world. This greatly placed Enron and its leadership under great scrutiny from investors and stockholders. Along with many counts of fraudulent acts, Enron also has been documented for making numerous successful attempts at evading tax requirements set forth by the Internal Revenue Service. In the early 1990’s, the US Congress set forth a precedent that deregulated the sale and usage of electricity. Enron had numerous installations off shore in efforts to avoid paying taxes related to, at the time, this newly introduced legislation passed by the US government. Things started looking sketchy for Enron when Jeffrey Skilling, the company’s chief operating officer, resigned after only six months of being in the position. This shocked the public and scrupulous investigation ensued. Only days after Skilling’s resignation, which he claimed were personal and business related, he sold stock in Enron for an estimated thirty – three million dollars. As Skilling made his millions, Ken Lay, the chairman of the company, resumed the role of CEO and assured stockholders and investors that the stock was fine and that all was as normal. Numerous attacks on the company surfaced and Lay defended his company until the end, claiming that the barrage of attacks were not attacks on Enron, but on the free – market system itself. From here, things only began to continue to spiral downward for Enron. Many of its cohorts backed out on deals attempting to save the flailing company and all was lost. When people look at the Enron Scandal, they have a tendency to look at the late Ken Lay and think it was a personal act by Lay that lead to the fallout of the company. However, the scandals were a part of the very fabric knitting the entire company together. At virtually every level of the company, CEO’s, their constituents, advisers, etc, all were engaged in deviant behavior. Many high – ups in the company learned of the fall of Enron and began to sell all their shares on the stock market, making millions as Skilling did. Ken Lay’s wife sold all of her shares in the company ten to thirty minutes before the company bottomed out. She was later charged with numerous felonies surrounding her knowledge of the company’s fallout in congruence with her sells of worthless stock. Ken Lay was arrested in early 2006 and investigated tirelessly for his involvement in the scandals surrounding his company. Unexpectedly, in July of 2006, Ken Lay died from heart complications, just prior to receiving his sentence. Many suspected that Lay’s death was planned when knowledge of his sentence was encroaching. The Enron Scandals affected many people and cost billions in punitive damages all across the world. Foreign investors and workers lost all, along with investors within the United States. When Enron was finally proven to be worthless and all was lost for the company, the workers at their headquarters were given thirty minutes to pack their belongings and vacate the premises. Once this happened, everyone knew the company was done. It is said that approximately 4,000 employees were without work, insurance, and everyone lost all investments, 401K’s, etc with the company. This is the primary example of how a few deviant actions by high – ups turn to a snowball of illegal behavior and it eventually affects all parties involved. Skilling’s actions of claiming that no assets were needed within the company to avoid taxes, annual income claims, etc prove how one person can affect many. The most heart – breaking part of the Enron Scandals were that not only did people lose their jobs, they lost all they had ever worked for and all the back – up investments that its holders and investors had were not in other companies as they were led to believe they were; They were in sub – sectors of Enron, owned by the same people. Consequently, when Enron went under, Arthur Andersen and other companies tied to it went under as well. For investors, holders, etc, all was lost. Virtually everything they had was gone. What once was a blue chip share in the stock market was all of a sudden, worthless. A lesson to be learned from researching and reading about the Enron Scandal is how pertinent federal regulation is. Conservatives and Republicans want deregulation of most all things as they pertain to the free – market and through companies like Enron and Arthur Andersen, one can see how extreme and saddening the results are void of regulation. Federal regulation of investment companies is something that must be mandated for all within this nation. Without it, Enron scandals can happen anywhere. All that is needed for another Enron catastrophe to occur is a few deviant actions by high – up officials in a system void of federal government regulation.
mood: bothered Music: Mark Morrison - Return of the Mack	(0) comments

add comment

Anonymous guest, why not register, or login now.